Tata Global unaffected by weak rain; foreign biz doing well

Talking about the business of Tata Global Beverage, L Krishnakumar, CFO of the company said quarterly performances have been quite strong, both in terms of volumes and price increases. "The benefits of the price increases we took earlier are continuing and we are looking at selective price increases in India and certain other countries," he added.

The company is also doing good business overseas, particularly in US, UK and Russia, informed the CFO. Although, the monsoon this year has not been up to the mark, it has not had any impact on Tata Global's business, Krishnakumar told CNBC-TV18, owing to good rainfall in the tea growing areas. Here is the edited transcript of the interview on CNBC-TV18. Q: You have seen a strong set of numbers in the previous quarter. Can you give us a sense in terms of how exactly the volumes are panning out this quarter as well as the price realizations. Have you managed to take any price hikes in this current quarter?
A: I think we saw strong quarterly performance where both volumes and price increases drove a top line growth of 18%. We are seeing the trend continuing in this quarter. The benefits of the price increases we took earlier are continuing and we are looking at selective price increases in India and certain other countries. Q: Can you give us a sense with regards to the international business. How exactly is the sentiment panning out with regards to this international business at this point in time and where exactly are you seeing the most possible traction in terms of geographies?
A: The UK business did particularly well in the first quarter and we are seeing that continuing in terms of share performance in UK. We are also seeing good performance of the coffee business in Russia and in the US.
_PAGEBREAK_ Q: There has been this global weather situation, drought not only in India but also extreme weather in the US and Brazil. Considering all these, are you expecting any wide fluctuation in prices which could impact your pricing decision across various geographies?
A: I think it is a little early to be definitive about it. Fortunately in India the rainfall has been good in the tea growing areas. There is some concern about a drop in Brazil. But I guess we'll have to wait for a few more months to be definitive about it. Q: At a macro level most of the Indian FMCG companies for staples haven't seen any significant slowdown although, there has been some discretionary slowdown. At your end are you experiencing any slowdown in India or in the developed markets where you operate?
A: In India definitely there is no slowdown. The underlying sentiment for staples and tea in particular, continues to be strong. In developed markets, there is a bit of trading for values. So we are seeing more sale of large packed formats as opposed to smaller formats. Q: In case there is a price spike in raw material prices, are you in a position to pass on those prices to your consumers given your market share and how peers are positioned?
A: We are a strong brand and we are fairly confident that like in the past, we'll be able to take up prices in a volatile scenario. Q: Can you update us on what exactly is happening on the Starbucks joint venture (JV)? We do understand that a new management or a new MD was assigned for the JV.
A: You'll have to wait for a formal announcement. We hope to make an announcement in the next month or so.